Sunday, November 18, 2012

Horatio Alger Always Was a Cruel Myth

Millions still believe that if you work hard and play by the rules, you will be a financial success. That, of course, is a lie. Nepotism and other connections play a huge role, inheritance is a factor, marriage to a rich person is a factor, pure luck is a huge factor, and being a crook who doesn't play by the rules also helps.

The Horatio Alger tale has been a popular one for conservatives, but the OECD, the Economic Policy Institute and the National Journal all came to the same conclusion: the future earnings of a child in the U.S. is closely correlated to the earnings of his or her parents. This lack of mobility is more prevalent in the U.S. than in almost all other OECD countries.

Only 4 percent of those raised in the bottom quintile make it to the top quintile as adults. Only about 20 percent even make it to the top half.

A big part of the problem is the severe degree of poverty for our nation's children. According to UNICEF, among industrialized countries only Romania has a higher child poverty rate than the United States. Just in the last 10 years the number of impoverished American children increased by 30 percent.

And it's much worse for minorities. While 12 percent of white children live in poverty, 35 percent of Hispanic children and 39% of black children start their lives in conditions that make simple survival more important than the American Dream. Eighty percent of black children who started in or near the top half of U.S. income levels experienced downward mobility later in life.

The traditional ladders for upward mobility for the masses, education and unions, are being kicked out from under the vast majority of people.

The rich, at least those who believe in an unequal society, want to limit upward mobility because they want to keep their exclusivity.